Program Review: Elementary, Secondary, and Post-Secondary Education

This report, the latest in a series responding to the Act's mandate, updates and adds new information on the use of Recovery Act funds for elementary, secondary, and post-secondary education. Future GAO reports will focus on additional programs that have been funded under the Recovery Act.

What GAO Found

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided $70.3 billion for three education programs—the State Fiscal Stabilization Fund (SFSF); Title I, Part A of the Elementary and Secondary Education Act (Title I); and Individuals with Disabilities Education Act (IDEA), Part B. One goal of the Recovery Act was to save and create jobs, and SFSF also requires states to report information intended to increase transparency and advance educational reform.

Local Education Agencies Have Obligated Most of Their Funds, Primarily on Retaining Teachers, but the Funding Cliff May Reduce Educational Services

As of September 9, 2011, in the 50 states and the District of Columbia, about 4 percent of the obligated Recovery Act funds remain available for expenditure. Teacher retention was the primary use of Recovery Act Education funds according to GAO's nationally representative survey of Local Education Agencies (LEAs). The funds also allowed recipients to restore state budget shortfalls and maintain or increase services. However, the expiration of funds and state budget decreases may cause LEAs to decrease services, such as laying off teachers. We also found that nearly a quarter of LEAs reported lowering their spending on special education, as allowed for under IDEA provisions that provide eligible LEAs the flexibility to reduce spending by up to a half of the amount of any increase in federal IDEA funding from the prior year. However, even with this flexibility, many LEAs reported having difficulty maintaining required levels of special education spending. In addition, two states have not been able to meet required spending levels for IDEA or obtain a federal waiver from these requirements. For states whose waivers were denied and cannot take action to remedy the shortfall in the fiscal year in question, their IDEA funding reductions may be long-lasting.

The Department of Education Plans to Assess Results of Recovery Act Funds

The Department of Education (Education) plans to conduct two types of systematic program assessments to gauge the results of Recovery Act-funded programs that focus on educational reform: program evaluation and performance measurement. In the coming years, Education plans to produce an evaluation that will provide an in-depth examination of various Recovery Act programs' performance in addressing educational reform. In addition, for the SFSF program, Education plans to measure states' ability to collect and publicly report data on preestablished indicators and descriptors of educational reform, and it plans to provide a national view of states' progress. Education intends for this reporting to be a means for improving accountability to the public in the shorter term. Further, Education officials plan to use states' progress to determine whether a state is qualified to receive funds under other future reform-oriented grant competitions.

Education and States Help Ensure Accountability, but Education Did Not Consistently Communicate SFSF Monitoring Concerns to States

Numerous entities help ensure accountability of Recovery Act funds through monitoring, audits, and other means, which have helped identify areas for improvement. Given the short time frame for spending these funds, Education's new SFSF monitoring approach prioritized helping states resolve monitoring issues and allowed Education to target technical assistance to some states. However, some states did not receive monitoring feedback promptly and this feedback was not communicated consistently because Education's monitoring protocol lacked internal time frames for following up with states.

Education and States Continue to Oversee the Quality of Recipient Reporting Data in Latest Round of Reporting

Education and state officials reported using a variety of methods to ensure recipient reported data are accurate. They also use recipient reported data to enhance their oversight and monitoring efforts. According to Recovery.gov, the Recovery Act funded approximately 286,000 full-time equivalents (FTE) during the eighth round of reporting, which ended June 30, 2011, for the education programs GAO reviewed. Despite the limitations associated with FTE data, Education found these data to be useful in assessing the impact of grant programs on saving and creating jobs.